Exclusive: CCI raids media advertisers over alleged price collusion, say sources

The Competition Commission of India (CCI), the country’s fair trade regulator, has conducted raids on the premises of a number of foreign media advertising companies, including GroupM, Interpublic Group and Dentsu, in parts of the National Capital Region (NCR) and Mumbai, Zee Business learned from sources. The authorities conducted the searches in relation with media advertisers allegedly indulging in price collusion including fixing discounts with media companies to secure contracts from clients, the sources said. Broadcasters' industry group Indian Broadcasting and Digital Foundation was also learned to be under the lens. 

The alleged miscreants decided rates in advance for air time and print space on the media networks, they added. 

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The investigators may seize documents and take testimony as part of the operation, said the sources. 

At the time of publishing this report, they were learned to have raided several locations in relation with the investigation.

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Several top agencies and major broadcasters were involved in the alleged fixing of advertisement rates, said the sources.

Competition watchdog CCI’s action comes at a time when the country’s media and advertising landscape is undergoing a major transformation.

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Earlier on Tuesday, the Nifty Media index—which captures the performance of some of the most prominent media houses in the country—surged 3.6 per cent amid a broad-based rise on Dalal Street. Both headline indices gained 1.5 per cent for the day, with the Sensex surging 1,131.3 points to settle at 75,301.3 and the Nifty50 rising to 22,834.3, up 325.6 points. Read more on how the market fared on March 18

What is CCI and what does it do?

Established in 2003 under the Competition Act, CCI is a statutory body that ensures fair competition in the country. One of its key responsibilities is to prevent practices that restrict competition while ensuring a fair environment for the consumer.

The Act prohibits anti-competitive agreements and abuse of dominant position, while eliminating any practice that potentially leaves an adverse effect on competition. CCI also works to promote healthy competition while ensuring the freedom of trade in the domestic markets.